Financial Markets Daily Report 10 octubre 2022
Risk aversion continued to set the tone during a highly volatile session at the end of the week, as investors read the US payrolls report as evidence that the Fed will continue tightening monetary policy.
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- Risk aversion continued to set the tone during a highly volatile session at the end of the week, as investors read the US payrolls report as evidence that the Fed will continue tightening monetary policy.
- In particular, employment rose by 263k in September, broadly in line with consensus, while the jobless rate ticked down by 0.2pp to 3.5%, in part by a modest drop in the participation rate. Wages rose by 5.0% y/y, after 5.2%. In Europe, industrial production fell by 0.8% m/m in Germany in August while retail sales dropped by 1.3%.
- In this context, stocks fell while sovereign bond yields continued to march higher, as expectations about the path of policy rates were adjusted upwards. The USD appreciated against its peers, with the EUR trading below $0.98.
- This week, the focus will turn to the September’s CPI inflation report in the US (Thursday) and in China (Friday) as well as the release of the minutes of the last Fed meeting (Wednesday).